CHANGE OF CONTROL CONTRACT
LONE STAR STEAKHOUSE & XXXXXX, INC.
000 X. XXXXXXX, XXXXX 000
XXXXXXX, XXXXXX 00000
CONFIDENTIAL
January 3, 2001
Xxxx X. Xxxxx
Executive Vice President
Lone Star Steakhouse & Saloon, Inc.
000 X. Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Dear Xx. Xxxxx:
A. It is expected that Lone Star Steakhouse & Saloon, Inc. (the
"Company") from time to time will consider the possibility of an acquisition by
another company or other change of control (as hereinafter defined). The Board
of Directors of the Company recognizes that such consideration can be a
distraction to you and can cause you to consider alternative employment
opportunities. The Board of Directors has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have your continued dedication and objectivity, notwithstanding the possibility,
threat or occurrence of a Change of Control of the Company.
B. The Board of Directors believes that it is in the best interests of
the Company and its stockholders to provide you with an incentive to continue
his or her employment and to motivate you to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
C. The Board believes that it is imperative to provide you with certain
severance benefits upon your termination of employment following a Change of
Control that provide you with enhanced financial security and incentive and
encouragement to you to remain with the Company notwithstanding the possibility
of a Change of Control.
Therefore the Board of Directors of the Company has determined that it
is in the best interests of the Company and its stockholders to offer you the
following agreement (the "Agreement") which provides you with certain severance
payments and benefits if your employment terminates following a Change of
Control.
ARTICLE I
DEFINITIONS
1.1 Definitions
Whenever used in this Agreement, the following capitalized
terms shall have the meanings set forth in this Section, certain other
capitalized terms being defined elsewhere in this Agreement:
(a) "Annualized Compensation" means the sum of (i) your
highest level of Compensation (exclusive of any bonus(es)) within one (1) year
of the date on which your employment terminates and (ii) the bonus(es) included
in the definition of "Compensation".
(b) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 promulgated under the Exchange Act.
(c) "Board of Directors" means the Board of Directors of the
Company.
(d) "Change of Control" of the Company means and includes any
of the following:
(i) Any person or "Group" (as defined in Section 13(d) of
the Exchange Act), excluding for this purpose the Company or any Subsidiary of
the Company, or any employee benefit plan of the Company or any Subsidiary of
the Company, or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of such plan which acquires beneficial
ownership of voting securities of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly
of securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities; provided,
however, that no Change of Control shall be deemed to have occurred as the
result of an acquisition of securities
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of the Company by the Company which, by reducing the number of voting securities
outstanding, increases the direct or indirect beneficial ownership interest of
any person to thirty percent (30%) or more of the combined voting power of the
Company's then outstanding securities, but any subsequent increase in the direct
or indirect beneficial ownership interest of such a person in the Company shall
be deemed a Change of Control; and provided further that if the Board of
Directors of the Company determines in good faith that a person who has become
the beneficial owner directly or indirectly of securities of the Company
representing thirty percent (30%) or more of the combined voting power of the
Company's then outstanding securities has inadvertently reached that level of
ownership interest, and if such person divests as promptly as practicable a
sufficient amount of securities of the Company so that the person no longer has
a direct or indirect beneficial ownership in thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities, then no
Change of Control shall be deemed to have occurred;
(ii) The individuals who, as of January 3, 2001, are
members of the Company's Board of Directors (the "Existing Directors"), cease,
at or prior to January 3, 2003, for any reason, to constitute at least a
majority of the number of authorized directors of the Company as determined in
the manner prescribed in the Company's Certificate of Incorporation and Bylaws;
provided, however, that if the election, or nomination for election, by the
Company's stockholders of any new director was approved by a vote of at least a
majority of the Existing Directors, such new director shall be considered an
Existing Director; provided further, however, that no individual shall be
considered an Existing Director if such individual initially assumed office as a
result of either an actual or threatened election contest or other actual or
threatened solicitation of proxies by or on behalf of anyone other than the
Board of Directors (a "Proxy Contest"), including by reason of any agreement
intended to avoid or settle any election contest or Proxy Contest.
(iii) Consummation of (1) an agreement for the sale,
assignment, lease conveyance or other disposition of the Company or all or
substantially all of the Company's assets, (2) a plan of merger, consolidation
or reorganization of the Company with any other corporation whether or not the
Company is the person surviving or resulting therefrom, or (3) a similar
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transaction or series of transactions involving the Company (any transaction
described in parts(1) through (3) of this subparagraph (iii) being referred to
as a "Transaction"), in each case unless after such a Transaction (x) the
shareholders of the Company immediately prior to the Transaction continue to
own, directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the new (or continued) entity
(including, but not by way of limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company's former
assets either directly or through one or more subsidiaries) immediately after
such Transaction, in substantially the same proportion as their ownership of the
Company immediately prior to such Transaction, (y) no person (excluding any
entity resulting from such Transaction or any employee benefit plan (or related
trust) of the Company or of such entity resulting from such Transaction)
beneficially owns, directly or indirectly, twenty percent (20%) or more of the
then combined voting power of the then outstanding voting securities of such
entity, except to the extent that such ownership existed prior to the
Transaction, and (z) at least a majority of the members of the board of
directors of the entity resulting from such Transaction were Existing Directors
at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Transaction; or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
Any other provision of this Agreement to the contrary
notwithstanding, a "Change of Control" shall not include any transaction
described in subparagraph (i) or (iii), above, where, in connection with such
transaction, you and/or any party acting in concert with you substantially
increases your or its, as the case may be, ownership interest in the Company or
a successor to the Company.
(e) "Company" means Lone Star Steakhouse & Saloon, Inc., a
Delaware corporation, and any successor or assignee as provided in Article IV.
(f) "Compensation" means and includes all of your base salary
attributable to your employment with the Company and/or any of its Subsidiaries
as reported in the W-2 prepared by the Company (other than income attributable
to the exercise of stock
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options). In addition, Compensation shall include, but not be limited to, any
amounts excludable from your gross income for federal income tax purposes
pursuant to Section 125 or Section 401(k) of the Internal Revenue Code of 1986,
as amended, or deferred pursuant to any Company or Subsidiary plan or program
including any matching contributions by the Company plus your target cash bonus
under all performance-related criteria (including personal objectives)
applicable prior to the Change of Control, for the fiscal year during which a
Change of Control occurs, and other regular cash compensations or reimbursements
of non-business expenses, if any, including, but not limited to, automobile
allowance and gasoline reimbursement.
(g) "Disability" means a physical or mental infirmity which
substantially impairs your ability to perform your material duties for a period
of at least one hundred eighty (180) consecutive calendar days and, as a result
of such Disability, you have not returned to your full-time regular employment
or officership prior to termination.
(h) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
(i) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(j) "Just Cause" means the termination of your employment or
officership as a result of fraud, misappropriation of or intentional material
damage to the property or business of the Company (including its Subsidiaries),
or conviction of a felony.
(k) "Person" shall have the meaning ascribed to such term in
Section 3 of the Exchange Act and the rules and regulations promulgated
thereunder.
(l) "Severance Payment" means the payment of severance
compensation as provided in Article II.
(m) "Subsidiary" means any corporation or other Person, a
majority of the voting power, equity securities or equity interest of which is
owned directly or indirectly by the Company.
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ARTICLE II
SEVERANCE PAYMENTS
2.1 Right to Severance Payment
If there has been a Change of Control of the Company and you
are an active employee or an officer of the Company at the time of the Change of
Control, and thereafter any of the following occur (a) within seven hundred
thirty days (730) calendar days from and including the date of the Change of
Control, your employment or officership is involuntarily terminated by the
Company for any reason (other than Just Cause or your death or Disability), (b)
there shall be a reduction in your base salary or other compensation as in
effect immediately prior to the Change of Control, (c) you are placed in any
position of lesser stature than that of Executive Vice President of the Company;
are assigned duties inconsistent with the Executive Vice President or duties
which, if performed, would result in a significant change in the nature or scope
of powers, authority, functions or duties inherent in such positions on the date
hereof; is assigned performance requirements or working conditions in effect on
the date hereof; or are accorded treatment on a general basis that is in
derogation of your status as an Executive Vice President, (d) any act by the
Company which under Kansas law or statute would constitute a constructive
termination of your employment, or (e) any requirement of the Company that the
location at which you perform your principal duties for the Company be outside a
radius of 25 miles from the location at which you performed such duties
immediately prior to the Change of Control; then the Agreement shall be deemed
to have been terminated by the Company otherwise than by reason of Just Cause
and the Company shall pay to you within five days after notice from you to such
effect a lump sum cash payment equal to the amount specified in Section 2.2(a)
hereof. For purposes of determining whether you are an active employee or an
officer of the Company at the time of the Change of Control, you will still be
considered to be an active employee or officer if you are on sick leave,
military leave or any other leave of absence approved by the Company or any of
its Subsidiaries.
2.2 Amount of Severance Payment and Replacement of Options
(a) If you become entitled to a Severance Payment under this
Agreement, you shall receive a lump sum payment equal to 2.99 times one year's
Annualized Compensation.
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(b) The Severance Payment otherwise calculated under this
Section 2.2 shall be reduced by the amount of cash severance-type benefits to
which you may be entitled pursuant to any other severance plan, agreement,
policy or program of the Company or any of its Subsidiaries; provided that if
the amount of cash severance benefits payable under such other severance plan,
agreement, policy or program is greater than the amount payable pursuant to this
Agreement, you will be entitled to receive the amounts payable under such other
plan, agreement, policy or program. Without limiting other payments which would
not constitute "cash severance-type benefits" hereunder, any cash settlement of
stock options, accelerated vesting of stock options and retirement, pension and
other similar benefits shall not constitute "cash severance-type benefits" for
purposes of this Section 2.2(b).
(c) Notwithstanding any provision in the Company's 1992
Incentive and Non-Qualified Stock Option Plan, as amended, or in this Agreement
in the event there is a Change of Control, the Company shall, at no cost to you,
replace any and all stock options granted by the Company and held by you at the
time of the Change of Control, whether or not vested, with an equal number of
unrestricted and fully vested stock options to purchase shares of the Company's
Common Stock (the "Option Replacement").
Alternatively, in the event of a Change of Control in
Section 2.1 hereof, in lieu of the Option Replacement, you may elect to
surrender your rights to such options, and upon such surrender, the Company
shall pay to you either an amount in cash per stock option then held, which is
the greater of (i) the average price per share paid in connection with the
acquisition of control of the Company if such control was acquired by the
payment of cash or the then fair market value of the consideration paid for such
shares if such control was acquired for consideration other than cash, (ii) the
price per share paid in connection with any tender offer for shares of the
Company's Common Stock leading to control, or (iii) the mean between the high
and low selling price of such stock on the Nasdaq National Market or other
market on which the Company's Common Stock is then traded on the date on which
you are entitled to a Severance Payment.
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2.3 Gross-Up Payment
If it shall be determined that any payment or distribution by
the Company to or for the benefit of you pursuant to this Agreement, including
any payments made pursuant to Articles V and VI of this Agreement(a "Base
Payment") would be subject to the excise tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then
you shall be entitled to receive an additional payment (the "Gross-Up Payment")
in an amount such that the net amount retained by you, after the calculation and
deduction of any Excise Tax on the Base Payment and any federal, state, and
local taxes and Excise Tax on the Gross-Up Payment, shall be equal to the Base
Payment. In determining this amount, the amount of the Gross-Up Payment
attributable to federal income taxes shall be reduced by the maximum reduction
in federal income taxes that could be obtained by the deduction of the portion
of the Gross-Up Payment attributable to state and local income taxes. Finally,
the Gross-Up Payment shall be reduced by income or excise tax withholding
payments made by the Company to any federal, state, or local taxing authority
with respect to the Gross-Up Payment that were not deducted from compensation
payable to you.
All determinations required to be made under this Section 2.3,
including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment, and the assumptions to be utilized in arriving at such
determination, except as specified above, shall be made by the Company's
independent auditor immediately prior to the date of the Change of Control (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and you within fifteen (15) business days after the receipt of
notice from you that there should be a Gross-Up Payment. The determination of
tax liability made by the Accounting Firm shall be subject to review by your tax
advisor, and if your tax advisor does not agree with the determination reached
by the Accounting Firm, then the Accounting Firm and your tax advisor shall
jointly designate a nationally recognized public accounting firm, which shall
make the determination. All fees and expenses of the accountants and tax
advisors retained by either you or the Company shall be borne by the Company.
Any Gross-Up Payment shall be paid by the Company to you within five (5) days
after the receipt of the determination. Any determination by a jointly
designated public accounting firm shall be binding upon the Company and you.
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As a result of uncertainty in the application of Section 4999
of the Code at the time of the initial determination hereunder, it is possible
that Gross-Up Payments will not have been made by the Company that should have
been made consistent with the calculations required to be made hereunder
("Underpayment"). In the event that you thereafter are required to make a
payment of any Excise Tax, any such Underpayment shall be promptly paid by the
Company to or for the benefit of you along with any Gross-Up thereon to relieve
you of 100% of the cost of any Excise Tax and other Federal, state and local
taxes on the Underpayment.
2.4 No Duty of Mitigation
The Company acknowledges that it would be very difficult and
generally impracticable to determine your ability to, or the extent to which you
may, mitigate any damages or injuries you may incur by reason of the Change of
Control. The Company has taken this into account in entering into this Agreement
and, accordingly, the Company acknowledges and agrees that you shall have no
duty to mitigate any such damages and that you shall be entitled to receive your
entire Severance Payment regardless of any income which you may receive from
other sources following your termination after any Change of Control.
2.5 Payment in the Event of Death
If you should die before all amounts payable to you have been
paid, such unpaid amounts shall be paid to your beneficiary under this Agreement
or, if you have not designated such a beneficiary in writing to the Company, to
the personal representative(s) of your estate. For purposes of this Section 2.5,
you may designate an intervivos revocable living grantor trust as your
beneficiary.
2.6 Life and Health Insurance Coverage; Physical
If you are entitled to receive a Severance Payment under
Section 2.1, you will also be entitled to receive the following additional
benefits:
(a) Life insurance coverage for you and your dependents having
a face amount at least equal to the greater of (i) the amount in effect for you
(in your case) and/or your
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dependents (in the case of your dependents) on the date of the Change of
Control, or (ii) the amount in effect for you (in your case) and/or your
dependents (in the case your dependents) on the date of termination of service,
such coverage to be provided under the same plan or plans under which you (in
your case) or your dependents (in the case of your dependents) were covered
immediately prior to the termination of your employment or officership or
substantially similar plan(s) established by the Company or any of its
Subsidiaries thereafter. Such life insurance coverage shall be paid for by the
Company to the same extent as if you were still employed by the Company and you
will be required to make such payments as you would be required to make if you
were still employed by the Company. This coverage will continue for the period
hereinafter provided.
(b) Health insurance coverage (including any dental coverage,
if any) for you and your dependents under the same plan or plans under which you
were covered immediately prior to the termination of your employment or
officership or substantially similar plan(s) established by the Company or any
of its Subsidiaries thereafter. Such health insurance coverage shall be paid for
by the Company to the same extent as if you were still employed by the Company,
and you will be required to make such payments as you would be required to make
if you were still employed by the Company. This coverage will continue for the
period hereinafter provided.
(c) Payment for one physical examination, to be performed by
the physician of your choice.
(d) The benefits provided under this Section 2.6 shall
continue for a period of two (2) years following the date of termination of your
employment or such longer period as provided in any agreement relating to any of
such benefits between you and the Company; provided, however, that the benefits
for medical coverage under the provisions of Section 2.6(b) shall end as of the
date you become covered under any other group health plan that you do not have
as of the date of the Change of Control and any other group health plan not
maintained by the Company or any of its Subsidiaries which provides equal or
greater benefits than such plan and which does not exclude any pre-existing
condition that you or your dependents may have at that time.
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2.7 Miscellaneous
If you are entitled to receive a Severance Payment under
Section 2.1, and at the time of the occurrence of a Change of Control you were
the primary user of a Company or Subsidiary automobile that was provided to you
at the expense of the Company or any of its Subsidiaries, the Company will take
all action to transfer ownership of the automobile to you at no cost to you
other than any income, FICA and medicare tax due on the value thereof. If the
automobile has been leased by the Company or any of its Subsidiaries, instead of
having the option to purchase the automobile, the Company will, at your written
request made within thirty (30) calendar days after you become entitled to
receive a Severance Payment hereunder, promptly use its best efforts to have the
applicable lease assigned to you.
2.8 Withholding of Taxes
The Company may withhold from any amounts payable under this
Agreement all federal, state, city or other taxes required by applicable law to
be withheld by the Company.
2.9 No Setoff
The Company's obligation to make Severance Payments to you
pursuant to this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any circumstances, including, but not limited to, any
setoff, counterclaim, recoupment, defense or other right which the Company or
any of its Subsidiaries may have against you or others.
2.10 Benefits Under Other Plans
The benefits that you may be entitled to receive pursuant to
Section 2.6 of this Agreement are not intended to be duplicative of any similar
benefits to which you may be entitled from the Company or any of its
Subsidiaries under any other severance plan, agreement, policy or program
maintained by the Company or any of its Subsidiaries. Accordingly, the benefits
to which you are entitled under Section 2.6 shall be reduced to take account of
any other similar benefits to which you are entitled from the Company or any of
its Subsidiaries; provided, however, that if the amount of benefits to which you
are entitled under such other severance plan, agreement, policy or program is
greater than the benefits to which you are entitled under Section 2.6 of this
Agreement, you will be entitled to receive the full
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amount of the benefits to which you are entitled under such other plan,
agreement, policy or program.
ARTICLE III
OTHER RIGHTS AND BENEFITS NOT AFFECTED
3.1 Other Benefits
This Agreement does not provide a pension for you nor shall
any payment hereunder be characterized as deferred compensation. Except as set
forth in Sections 2.2(b), 2.3 and 2.10, neither the provisions of this Agreement
nor the Severance Payment provided for hereunder shall reduce any amounts
otherwise payable, or in any way diminish your rights as an employee, whether
existing now or hereafter, under any benefit, incentive, retirement, stock
option, stock bonus or stock purchase plan or any employment agreement or other
plan or arrangement not related to severance. Any such other amounts or benefits
payable shall be included, as necessary, for making any of the calculations
required under Section 2.3.
3.2 Employment Status
This Agreement does not constitute a contract of employment or
impose on you any obligation to remain in the employ of the Company, nor does it
impose on the Company or any of its Subsidiaries any obligation to retain you in
your present or any other position, or to change the status of your employment
as an employee at will unless you have a separate written employment agreement
with the Company or its Subsidiaries. Nothing in this Agreement shall in any way
require the Company or any of its Subsidiaries to provide you with any severance
benefits prior to a Change of Control, nor shall this Agreement ever be
construed in any way as establishing any policies or requirements of the Company
or any of its Subsidiaries for the termination of your employment or the payment
of severance benefits to you if your employment terminates prior to a Change of
Control, nor shall anything in this Agreement in any way affect the right of the
Company or any of its Subsidiaries in its absolute discretion to change prior to
a Change of Control one or more benefit plans, including but not limited to
pension plans, dental plans, health care plans, savings plans, bonus plans,
vacation pay plans, disability plans, and the like.
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ARTICLE IV
SUCCESSOR TO COMPANY
The Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Agreement, in the same manner and to the same extent that the Company would
be required to perform if no such succession or assignment had taken place. In
such event, the term "Company," as used in this Agreement, shall mean (from and
after, but not before, the occurrence of such event) the Company as herein
before defined and any successor or assignee to the business or assets which by
reason hereof becomes bound by the terms and provisions of this Agreement.
ARTICLE V
LEGAL FEES AND EXPENSES
The Company shall pay as they become due all legal fees, costs of
litigation and other expenses incurred in good faith by you as a result of the
Company's refusal or failure to make the Severance Payment to which you become
entitled under this Agreement, as a result of the Company's contesting the
validity, enforceability or interpretation of this Agreement or of your right to
benefits hereunder. You shall be conclusively presumed to have acted in good
faith unless a court makes a final determination not otherwise subject to appeal
to the contrary.
ARTICLE VI
ARBITRATION
Except as otherwise provided in Section 2.3, you shall have
the right and option (but not the obligation) to elect (in lieu of litigation)
to have any dispute or controversy arising under or in connection with this
Agreement not otherwise resolved through the claims procedure set forth in
Section 7.11, including any dispute under Section 2.3, settled by arbitration,
conducted before a panel of three arbitrators sitting in a location selected by
you within fifty (50) miles from the location of your job with the Company or
any of its Subsidiaries, in accordance with the rules of the American
Arbitration Association then in effect. Judgement may be entered on the award of
the arbitrator in any court having jurisdiction. All expenses of such
arbitration, including the fees and expenses of your counsel,
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shall be borne, and paid as incurred, by the Company; provided that the Company
shall only be required to pay your fees and expenses if they are incurred in
good faith. You shall be conclusively presumed to have acted in good faith
unless and until the arbitrator makes a final determination to the contrary.
ARTICLE VII
MISCELLANEOUS
7.1 Applicable Law
To the extent not preempted by the laws of the United States
and in the interest of interpreting this Agreement in a uniform manner with
other similar agreements being entered into by the Company with other of its and
its Subsidiaries' employees regardless of the jurisdiction in which you are
employed or any other factor, the laws of the State of Kansas shall be the
controlling law in all matters relating to this Agreement, regardless of the
choice-of-law rules of the State of Kansas or any other jurisdiction.
7.2 Construction
No term or provision of this Agreement shall be construed so
as to require the commission of any act contrary to law, and wherever there is
any conflict between any provision of this Agreement and any present or future
statute, law, ordinance, or regulation contrary to which the parties have no
legal right to contract, the latter shall prevail, but in such event the
affected provision of this Agreement shall be curtailed and limited only to the
extent necessary to bring such provision within the requirements of the law.
7.3 Severability
If a provision of this Agreement shall be held illegal or
invalid, the illegality or invalidity shall not affect the remaining parts of
this Agreement and this Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included.
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7.4 Headings
The Section headings in this Agreement are inserted only as a
matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular Section.
7.5 Notice of Termination
Following a Change of Control, any purported termination of
your employment by the Company or any of its Subsidiaries shall be communicated
by a written notice of termination, which such notice shall indicate the
specific termination provision in this Agreement, if any, relied upon and which
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under any provision so indicated. The
failure to provide such notice shall create a rebuttable presumption that you
are entitled to a Severance Payment and the other benefits provided by this
Agreement.
7.6 Assignability
Neither this Agreement nor any right or interest therein shall
be assignable or transferrable (whether by pledge, grant of a security interest,
or otherwise) by you, your beneficiaries or legal representatives, except by
will, by the laws of descent and distribution or intervivos revocable living
grantor trust as your beneficiaries. This Agreement shall be binding upon and
shall inure to the benefit of the Company, its successors and assigns, and you
and shall be enforceable by them and your legal personal representatives.
7.7 Entire Agreement
This Agreement constitutes the entire agreement between the
Company and you regarding the subject matter hereof and supersedes all prior
agreements, if any, understandings and arrangements, written or oral, between
the Company and you with respect to the subject matter hereof.
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7.8 Term
If a Change of Control has not theretofore occurred, this
Agreement shall expire and be of no further force and effect on January 3, 2003;
provided that the Board of Directors of the Company may, at any time prior to
the expiration thereof, extend the term of this Agreement for a term of up to
two years, including extending the date set forth in the third line of Section
1.1(d)(ii)of the definition of "Change of Control", without any further action
on your part.
If a Change of Control occurs, this Agreement shall continue
in full force and effect, and shall not terminate or expire until the expiration
of seven hundred thirty-one (731) calendar days from and including the date of
the Change of Control, at which time this Agreement shall terminate except if
you become entitled to Severance Payments hereunder prior to such time. If you
become so entitled to Severance Payments hereunder, this Agreement shall
continue and be effective until you (or the person(s) specified in Section 2.5)
shall have received in full all Severance Payments and other benefits to which
you are entitled under this Agreement, at which time this Agreement shall
terminate for all purposes.
7.9 Amendment
Except as set forth in Section 7.8, no provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by you and the Company. No
waiver by the Company or you at any time or any breach by the other party of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time. No agreement or
representations, written or oral, express or implied, with respect to the
subject matter hereof, have been made by either party which are not expressly
set forth in this Agreement.
7.10 Notices
For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or
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sent by certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses last given by each party to the other, provided that
all notices to the Company shall be directed to the attention of the Board of
Directors with a copy to the General Counsel. All notices and communications
shall be deemed to have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that notice of change of
address shall be effective only upon actual receipt. No objection to the method
of delivery may be made if the written notice or other communication is actually
received.
7.11 Administration
The Company has entered into agreements similar to this
Agreement herein with other employees and officers of the Company or its
Subsidiaries. These agreements, taken together, constitute welfare benefit plan
within the meaning of Section 3(1) of ERISA. The Administrator of such plan,
within the meaning of Section 3(16) of ERISA, and the Named Fiduciary thereof,
within the meaning of Section 402 of ERISA, is the Company.
If you believe you are entitled to a benefit under this
Agreement, you may make a claim for such benefit by filing with the Company a
written statement setting forth the amount and type of payment so claimed. The
statement shall also set forth the facts supporting the claim. The claim may be
filed by mailing or delivering it to the Secretary of the Company.
Within thirty (30) calendar days after receipt of such a
claim, the Company shall notify you in writing of its action on such claim and
if such claim is not allowed in full, shall state the following in a manner
calculated to be understood by you:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent provisions of this
Agreement on which the denial is based;
(c) A description of any additional material or information
necessary for you to be entitled to the benefits that have been denied and an
explanation of why such material or information is necessary; and
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(d) An explanation of this Agreement's claim review procedure.
If you disagree with the action taken by the Company, you or
your duly authorized representative may apply to the Company for a review of
such action. Such application shall be made within sixty (60) calendar days
after receipt by you of the notice of the Company's action on your claim. The
application for review shall be filed in the same manner as the claim for
benefits. In connection with such review, you may inspect any documents or
records pertinent to the matter and may submit issues and comments in writing to
the Company. A decision by the Company shall be communicated to you within
thirty (30) calendar days after receipt of the application. The decision on
review shall be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by you, and specific references
to the pertinent provisions of this Agreement on which the decision is based.
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If this Agreement is acceptable to you, please sign the
enclosed copy of this Agreement in the space provided below and return it to me.
Sincerely,
/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
Chairman and
Chief Executive Officer
ACCEPTED AND AGREED TO:
/s/ Xxxx X. Xxxxx
-------------------------
Xxxx X. Xxxxx
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